According to research from Moneyfacts, there are currently 231 deals available on the market, which is up a quarter since September 2021, when 186 products were available, and triple that of August 2020, when 74 products were available.
It is also nearly double the total products available in March 2020, where 162 products were available.
The number of lenders offering deals has also continued to grow, increasing from 20 on March 2020 up to 27 in January of this year.
This number has fluctuated, as figures show it fell to 14 in August 2020 but has stayed above 20 since 2021.
According to Moneyfacts the majority of the providers are currently building societies.
The average fixed rate has grown over the past year or so, hitting a high of 4.14 per cent of September, and now currently stands at 3.92 per cent.
The report noted that government rules around taxes and second homes, due to be introduced in 2023, may impact second homeowners and the holiday let market if they cannot meet new requirements.
The new rules say that holiday lets will need to be rented for a minimum of 70 days a year and available to rent for 14 days a year to qualify for tax relief.
Rachel Springall, spokesperson at Moneyfacts, said the growing desire of UK vacations rose due to the pandemic, making the holiday let an attractive option for borrowers and consequently lenders.
She said: “While the rise in choice is positive, the market is still relatively niche but could grow further with demand.”
Springall added that whether such “buoyant activity” will remain was “unknown” but pointed to research from Hodge which said they had seen a 173 per cent rise in holiday let mortgage applications.
Springall continued: “If the demand for a UK holiday in 2022 lessens, consumers may still get a reasonable return on any investment, but it’s vital for them to ensure they are offering a let during a bustling season so they do not miss out on a demand spike.
“There may also be the need to fund upfront costs to get a property at a high standard to let, to entice a larger clientele and to stand above the competition. Should this be the case, borrowers will need to think carefully about what can make them a unique booking, and this will often depend on their location and the time of year.”
Springall said it was important to seek advice from an independent financial adviser before entering a holiday let arrangement, especially given new small business rates relief were due to come into force next year.
She added that the new government rules on tax and second homes was “geared to protect genuine holiday lets and crack down on others” and said it would be interesting to see how it will affect those considering entering the market and may not be confident in meeting requirements.